Acct305 Week 4 Midterm Exam 2016 version/Acct305 Week 4 Midterm Exam 2016 version

1.Property, plant, and equipment and intangible assets are 

long-term revenue-producing assets.

created by the normal operation of the business and include accounts receivable.

all assets except cash and cash equivalents.

current and long-term assets used in the production of either goods or services.

2.(TCO 3) Our company exchanged land and cash of $5,000 for similar land. The book value and the fair value of the land were $90,000 and $100,000, respectively. Assuming the exchange lacks commercial substance, which amount is correct? 

Debit Land-old $90,000

Credit Land-old $90,000

Debit Land-old $95,000

Credit Land-old $95,000

3.(TCO 2) The exclusive right to benefit from a creative work, such as a film, is a 

patent.

copyright.

trademark.

franchise.

4.(TCO 4) Assuming an asset is used evenly over a 4-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year? 

Straight-line